Things We Wish We Knew About Money When We Graduated From High School

April 10, 2017

Graduation is just around the corner, and another crop of high school (and college) seniors that are ready to seize their independence and move into the real world. Although parents can do a lot to help prepare their kids for the real world, this is where the rubber hits the road. When you move out on your own, the stakes are higher and your money decisions really start mattering. Gone are the days when mismanaging money simply means not being able to buy an ice cream cone. I’ve asked several personal finance bloggers to share some of the things they wish they knew when they graduated high school.

I know that high school grads being high school grads, many will still choose to learn their lessons in the school of hard knocks, but hopefully some will heed the insights here and start their new-found life on the right financial foot. And even if you’re long out of high school, I’m sure you’ll find some great advice here. Also, head over to these guys’ and gals’ blogs after reading this roundup. They all regularly share fantastic tips, advice, tutorials and random thoughts on personal finance (and sometimes beyond), and all from a unique perspective. I can guarantee you’ll find some top-notch material, and perhaps even another favorite blog! Enjoy! And feel free to share some of the lessons you learned also!

Picky Pincher’s Wisdom

Oh lawd. I knew nothing about money when I graduated from high school. My parents did their best to teach me what they could, but nothing really sunk in. They gave me their debit card when I turned 16 and I had carte blanche to spend as I pleased. I can’t even tell you how much money I wasted on impulse buys like makeup, jewelry, and shoes.

18-year-old me wasn’t any better at managing her money. I chose to go to an incredibly expensive private university instead of opting for a full-ride elsewhere. Yup, I was one of those.

There are so many money lessons that I had to learn the hard way. Here are just a few of the things I wish I’d known when I graduated. Keep in mind that I graduated from high school only seven years ago, so I’m sure money lessons will follow this list. 🙂

1. Don’t believe the myth of college and student loans: I wish I’d known my fancy degree didn’t mean a damn thing in the real world. I should have gone to community college for my basics and then transferred to an affordable public school. Student loans are a great way to shoot your future self in the foot. I’ll finally pay these suckers off in May, but it wasn’t without a lot of work.

2. You don’t need a new car: Cars are designed for transportation, and that’s it. Take care of them and they can last you a long time. You don’t need a new, shiny car to be happy or to have a good life. Don’t take out debt to buy a new car–especially if you already have a perfectly good car, for heaven’s sake.

3. Debt is NOT normal: My parents, while well-intentioned, always told me that debt was normal. Debt was just a part of life that was unavoidable and necessary. I’ve since learned that is so, so not true. The key to success is avoiding the hell out of debt (student loans, car loans, credit cards) and paying for things in cash. If you can’t pay for it in cash, you can’t afford it. The only exception in my book is mortgages.

4. It’s okay to fail: Everybody makes mistakes. Life is about making mistakes. You’re never going to make the perfect decisions. It’s important not be too hard on yourself. Don’t make stupid decisions, like that tattoo I got the summer before college. (shudder)

Mrs. Picky Pincher is all about pinching the pennies that are important to you. She isn’t about sacrificing quality of life or being stingy with money. She spends money on the things that matter and cuts out the expenses that don’t matter. Check out her blog at Picky Pinchers!

Penny’s Thoughts

You’ll get lots of advice and you’ll meet people who try to steer your future in various directions. Remember that this is your ship to sail, so you get to set the course. And if things don’t go according to plan, don’t be afraid to adjust the sails. Some of the advice you encounter will be helpful, some won’t apply. And some advice will only really speak to you after you’ve ignored it for a while. That’s all OK.

Money will come and money will go at different points in your life. Money is very important, but it’s not the most important thing. Not by a long stretch. Find something in life that excites you. Make it your hobby or make it your career, just make it part of your life somehow. Passion and drive will take you far, perhaps much farther than simply chasing dollars ever could. But just because dollars aren’t everything doesn’t mean they don’t matter.

The decisions you make now set the groundwork for your future. The loans you take, the jobs you work, the internships you accept, the beer money you spend. It all counts. As you move through life, try to balance two perspectives: the short term and the long run. You can set yourself up for success now more than you even realize at this point. That’s probably overwhelming and scary, but it’s also a great reminder of how awesome you already are.

Penny’s goal is to live a little more purposefully, a little more deliberately, and a little more frugally one cent at a time. Check out her blog at She Picks Up Pennies!

The Miked-Up Beemer

“Man… I want this car. No… I NEED this car!” – My stream of consciousness. And I was just getting started…

I was on the lot looking for a graduation present. I had just finished my undergrad and was accepted as a graduate teaching assistant into grad school. You know what that means, right? Oh, you don’t? No worries, I got you. Not only do they pay for tuition, but also you’ll see that ballin’ salary! Doesn’t get better than this! Teach a couple of classes, get school paid for, AND see the check every month – just an all-around phenomenal deal. What classifies as a ballin’ salary, you ask? Oh, about $15-20k. (Yes, that’s annually) But let’s not waste any more time. Back to my idiocrity:

• It’s fast – check.
• It has 6 speeds – sweet.
• It’s a 2-door coupe that is low to the ground and short on excess headroom (never mind I’m a 6’3’’ 245 lb former football player at the time) – check.
• BMW – put that in the “win column.”
• Run-flat tires – awesome. This way if I hit a nail, I’ll just keep going… (found out the hard way that they’ll “run flat” for a short period of time to get you to the shop. That’s if you know you hit a nail. Oh – and they’re $425… Per tire).
• Ladies are gonna love this thing
• $430/month… But dude, look at all those positives. You’ve got savings to cover the overage (My present-day self is crying as I type this… who was this Jack Wagon?)

I did it. Pulled the trigger and made the purchase (BMW 128i), and that was the absolute best feeling moment of this whole buying experience. Well, I mean the leasing experience, so I wasn’t actually buying anything of value. No, I was renting that beautiful, sleek, lady-killing, speeding ticket magnet (#3), tire popping (1), savings draining, and financial hardship inducing German engineered beast of a car.

Damn thing was fun to drive, though.

Alright. I won’t bore you with the speeding tickets and punctured tires I referenced above – let me get to the heart of this story.

I bought leased this car as a single man with a solid financial history (up to this point). I was employed, knew how to cook, could carry a conversation, and was a former athlete… So I didn’t get it.

“Get what?” You’re thinking…

There was this lag time after serious girlfriend #2 that I couldn’t explain. At first, it was, “I need time to myself.” Then, “I need to find my path in life before I meet the one.” But, before too long it was, “What the heck man? What am I missing here?”

Then my roommate bought a Hummer and it clicked! A sweet ride will introduce me to the one! Let’s put aside for a moment that any lady that was after me for a car wasn’t a lady I was interested in long-term, anyhow. But I was young, without perspective and life experience, and that simple thought hadn’t crossed my mind. I took that $430/month BMW and all the self-confidence that went with it.

I drove that thing all over campus. Friends got rides, Young Jeezy got some play on the speakers, and the price of gas kept going up (the owner’s manual recommended premium…). I felt like a baller, that’s for sure, but the ladies didn’t seem to feel the same. A few months went by and the novelty started wearing off. The savings account quickly dropped and trended toward the red while I got caught up in my classes, research, and teaching assignments. Winter hit and the rear-wheel drive got added to the “negative” column. After a while, the car got me from A to B and that was about it.

But then something happened…

I met this girl. She was beautiful, smart, and laughed at my “jokes.”

No, I didn’t meet her while driving… That’s a dumb question so please don’t distract me from the story anymore, alright? Deal. Let’s continue.

We met on campus and the spark was real. I asked her out, she said “yes!” (she actually did sound that excited), and the date was on! First date went well so I tried for date #2. She was in. Best part? I was picking her up! And we were heading to the closest major city about 30 minutes away. Now this car could start to earn its keep!

3. Learn to be patient, and wait until you’ve saved enough to “pay cash” for an item you desire. This is especially true if the item is a “want” instead of a “need”, but it applies to both.

4. Know where your money is going. Start simple, but don’t ignore your personal cash flow. Monitor your spending, and automate savings so they come directly out of your account before you have time to spend the money.

5. Understand your employee benefits. If you’re not sure whether or not you’re optimizing “the match”, schedule a meeting with your HR department to go through your details. That’s why they’re there, so take advantage of their expertise.

6. Track your progress. Find something to measure that aligns with a goal you’re currently pursuing. Keep it simple to start, and expand as you grow.

Check out the rest of the letter here! Fritz writes about his journey towards anticipated early retirement at age 55 (2018) at The Retirement Manifesto.

Rich ‘Centsible’ Advice

When I graduated from high school, my thoughts about money could be boiled down to three words – “More is better”. I even had a huge poster with Lamborghinis and other high-dollar sports cars on it that read “Justification For Higher Education”.

My high school had a brief lesson on how to balance a checkbook, but my parents fostered the basics of my financial education. They taught me to pay bills ahead of time, balance my checkbook each month, keep a buffer in my account and stay out of credit card debt. This was invaluable and, though I got lost a few times, those lessons stuck with me.

But even though I had a basic understanding of personal finance, I thought the answer to everything was more money. I was of the mindset that money led to happiness and could solve most problems. And I thought if I went to college, worked hard and excelled, I was guaranteed a good salary. I would build my career and be “rich”!

So, what do I wish I knew about personal finance when I graduated high school? I wish I knew there were no guarantees. I wish I hadn’t given money so much power and I wasn’t so focused on “making it”. I wish I had realized money is just a tool to be used to create a life of freedom and happiness, not an end all be all. And I wish I better understood the implications of taking on several thousand dollars worth of student loan debt.

Even though I didn’t know then what I know now, I’m glad I eventually learned these important lessons, paid off my debt and continue to work toward financial freedom!

Amanda writes on a broad range of personal finance but focuses on tackling debt with frugal living at her blog, Centsibly Rich.

Wealth Well Done

I wish I would have thought more about how my mind ultimately creates the reality I live in. I wish I would have known that life isn’t about money, or becoming rich, or becoming powerful in a career. It’s about finding the simple things that make you happy and then disciplining your mind to find creative ways to create a life that is full of these things.

My confession is that when I got out of college, I relied way too much on my talent, and not enough on the substance that propels people to their dreams, such as: sacrifice, discipline, drive, and plain old hard work.

During college, I had a bad habit of thinking that as long as I looked the part, then I’d become the person I wanted to be. I looked up to my two uncles who were big-time corporate sales guys and thought if I could just look like them and talk like them, then success would naturally come and find me and I wouldn’t have to do anything.

I put WAY too much effort on trying to look like someone I was not and not enough effort on actually becoming the person my soul wanted to be.

It wasn’t until I left college, and was living two different lives (a hard partying life and a professional life), that the truth of life hit me:
I suddenly realized that it didn’t matter anymore about who my parents were, or what school I went to, or where I grew up. The truth of life is that it’s ultimately up to us to create. And if I wasn’t willing to put in the hard work to become a genuine honest individual, then I’d never be able to live a genuine, fulfilling life.

I suddenly realized that I didn’t need a million dollar salary to live my dream life. I just needed to kill the addictions to laziness and partying that were holding me down and replace those addictions with a great attitude, a spiritual purpose, and creative ways find awesome solutions to difficult problems in my life.

At that point, I stopped caring about money or a powerful career, and I went on a mission to become the coolest, best, and most determined person I could be. As I started to work on myself, I started to find my purpose in my life.

I’m 36 now, and I think I accidentally found my personal path to wealth: The journey never is about money. It’s about making the mental shift to become genuinely great at who you are, and then help people find themselves along the way.

If you spend less than you make and invest in opportunities that help you grow the money you save, you will naturally find wealth, happiness, purpose, and your dream life along the way.

My advice to my high school self would be: Your mind is going to be the power plant that builds your life. Always, always, always, be willing to kill your addictions to negative behaviors, and invest your time and energy into creating positive behaviors. This is how one starts their unique path to their dream life and wealth!

Bill and Amanda at Wealth Well Done are a couple who abandoned the normal path to redefine wealth with these three steps: 1) Master your Mind. 2) Compound your Cash. 3) Pursue your Purpose in Life.

Financial Advice for Atypical People (AKA Everyone)

I remember having an economics class senior year in high school. The only thing I remember being taught in that class was how to write a check. The class was an entire semester and that’s the only thing I was able to take away from it.

I don’t remember anything about budgeting. There was a lot of “do this” or “don’t do that,” but there wasn’t any indication that things may go wrong, even if you do everything “right.” Things like “don’t spend more than you make” and “build your credit so you can borrow money” were commonplace sayings at home, but the mechanics of budgeting were never taught.

I had to figure quite a bit out on my own. I did decent but made quite a few spending mistakes.

After getting married at 21, my early 20’s were spent spending on eating out and literally not saving anything. I spent more than I made and at times have no clue how my wife and I paid the bills.

I distinctly remember one year before kids that we had both claimed 0 on our wages to get the most taken out of our paychecks for taxes. Thinking we were good and would probably get a big return from doing this, we ended up owing just under $3,000. That had to go on a credit card that took us quite a few years to pay off. Remember, no savings and overspending didn’t leave much to pay extra bills like this.

This brings me to the biggest thing that I wish I knew coming out of high school. Failure was inevitable. And not only was it going to be a part of life, it was okay to fail. I was told to not spend more than I made but I did it anyway. Why? I have absolutely no idea. I felt terrible about it, though.

Before I realized that failure and learning from these mistakes helped shape who I am today, I felt terrible about my failures. Looking back, I would always regret not saving for retirement or emergencies, always going out to eat, and not really providing for my wife.

Now, I’m careful with my money, spend it on what I value, and am almost debt-free except for my mortgage. How I think about money and how I manage my money now was directly influenced by what I learned from my failures in my 20’s.

Yes, it’s okay to make mistakes on your finances. It’s even better to learn from someone else’s mistakes, but you will fail at times.

And that’s okay. It’s okay to figure out the best way to budget for you and the best way to run your finances. In my experience, personal finance is personal and that means do what’s best for you and your situation.

If you fail, treat it as a learning experience rather than a chance to beat yourself up. You will only get stronger and better at managing your money YOUR way.

Tim approaches personal finance with the idea that since you are unique (atypical), your personal finance strategy should be too. Check out his blog at Atypical Finance.

Lessons Learned From My Family On A Budget

Don’t chase the newest things

The newest things always look so appealing, don’t they? When I first graduated, I was always trying to get the best of things, best phone, best computer, best this, best that. By chasing the newest things, I was throwing away a ton of money that I needed for other, more important things like college and living expenses.

One of the things that I remember purchasing was an iPhone. I remember getting it and feeling like I had made it because I had “the most powerful phone at the time”. This feeling was only fleeting since a new phone came out that fall and my phone was left in the dust.

Another example of this same thing was when I got a credit card to purchase a TV to fill my apartment with the coolest gadgets. It was a very nice tv, but I’ve since replaced it with a TV for less than 1/3rd of the cost. I mainly keep the old tv because of how much it cost and that I can’t bear to part with it. Also, it’s a good reminder of my stupidity of buying such expensive stuff that didn’t appreciate in value.

Debt is not a tool for consumer items

After high school, I used a credit card to purchase an awesome (at the time) new Sharp Aquos 32″ 720p flat screen tv for $1,500. It was a really nice tv and I still have it to this day, but I purchased it the wrong way, putting it on a credit card without a plan to pay it off. It ended up starting a spiral that we didn’t fully dig out of until 2013.

I’ve since learned that debt is not kind. It isn’t my friend. Debt steals and punishes if you don’t play by its rules. Removing debt or not taking on debt is a great way to free up you biggest wealth building tool that you have, your income. If you have more of your income to give, save and spend after paying your main obligations, you’ll be able to build margin much faster and grow your wealth. You can’t do this when you are buying things with debt. Save up and pay for things and you will get a better product, have less buyer’s remorse and slow down lifestyle creep more.

Go to college debt free

After high school, I had enough sense to go to community college because I didn’t save enough up to go to any other type of school. I wish I would’ve even possibly taken a year off to work and save up more to go debt free. I ended up taking out a loan for some of my schooling that I was paying off with interest. Start early and save up to go to school.

If you don’t have anything saved, look into your community college to start getting your general education credits and work as much as possible to get through the first couple years debt free while solidifying your plan.

Living on your own is expensive

I had some sense when I finished high school as my parents had groomed me to know that I would be living on my own soon and I should have a plan. I wish I would have spent more time living with room mates and saving the rest to build up an emergency fund before moving out. I had started to collect many things to move out with but didn’t have much in the way of savings.

If it’s your plan to move out right away, make sure that you have a solid emergency fund and a working budget that will still have margin once you are paying your living expenses.

Saving is very important to moving forward

When I graduated school, all I knew was that I wanted to go to community college and to get a job. I didn’t live on a budget and I didn’t have the habit of saving money. If you want to succeed once in the real world, you are going to have to develop a plan where you save for the future. Whether it be in an emergency fund and/or into retirement, start as soon as you can, it will be easier the earlier you start!

Make the most of your future

Graduating high school is an amazing time. There are so many things happening with all the graduation parties, life changes, and personal development changes that it’s hard to keep up with it all. However, I will say that learning from others that have been there and made mistakes is a great way to learn quicker if you can pull yourself off the mountain thinking you are ready to take on the world (I thought I knew everything when I graduated). By humbling yourself and at least taking advice from others into consideration, you might be able to dodge some of these tough lessons!

I will say that you are the future of the world as you will help to shape the future. You will be helping to run this country and will be solving many more problems in the future. I have faith that our future will succeed and thrive.

I will leave you with one of my favorite quotes from the Dr. Seuss book, “Oh, the Places You’ll Go!”:
So… be your name Buxbaum or Bixby or Bray
or Mordecai Ali Van Allen O’Shea,
you’re off to Great Places!
Today is your day!
Your mountain is waiting.
So… get on your way!

Steven blogs about his own family finances with the hope that he can inspire others to get out of debt, create a budget, and grow their net worth. Check out his blog at My Family on a Budget.

Advice from the Mastermind

7 years ago, I graduated high school. At the time, I didn’t know much about personal finance. Here are three things I wish I knew about personal finance when I graduated high school:

The effects of compounding

Building wealth is easy, but requires action and discipline.

Compounding is a beautiful thing. If you understand compounding, you can build tremendous wealth. If you don’t understand it, you won’t build wealth.

I wish I had known more about index funds and investing in general. I would have taken charge of my college savings and possibly started investing for the future.

It wasn’t until I was 23 that I finally got into investing for the future. Now, I’m building wealth through my IRA, 401k, and rental properties.

Don’t believe in getting rich quick

My 3rd year of college, I was approached on the sidewalk by some people who wanted to sell me on starting a business in a Multi Level Marketing scheme. While it wasn’t an illegal company I joined, I still spent about $300 and 30-40 hours of time trying to sell others on the scheme. Not my cup of tea!

Going to the casino and losing $50 many times… (I won $600 one time, but I’m probably down about $500 overall). The statistician inside of me is hurt by this behavior…

Do not spend money on things which will not bring direct pleasure

When I turned 21, I went to the bar and would have 4-5 drinks spending about $20 for the night. While not a lot for a night out, if you go out every weekend, that’s $1,000 a year just on drinks.

My freshman year, I bought about $300 in video game add-ons. Looking back, this was such a waste of money as I stopped playing these games 6 months later.

7 years later, I’m doing very well on these three points. I’m putting the compound effect to work with my retirement investing and my rental properties. I’m letting time work it’s magic and I’m trying not to spend money on things which will not bring me direct pleasure.
If there is anything I don’t know at this point in my life, I go look it up. I’ve developed a mindset to try to always be learning, asking questions, and looking to grow! This mindset has helped tremendously. I wonder what I will wish I’d have known 7 years from now!

Erik blogs at The Mastermind Within where he aims to build a collaborative community where ideas can flow openly, and readers can build knowledge and experience amazing personal growth.

The Independent Steward and Slave

What do I wish I knew about personal finance when I graduated high school? I wish someone had told me that I didn’t have to be everyone else. I graduated with several hundred other people, all headed down different paths in life, and I tried to be just like all of them. When I was around the more motivated classmates that knew exactly what their next steps were, I felt like I needed to go to college even though I had no idea what I wanted to study. When I was around the, uh… shall we say more “relaxed?” classmates, I felt like I needed to spend on video games, restaurants, and other things that would be fun now, but wouldn’t have a positive impact on future me. I was essentially a social chameleon, which meant that my finances, much like my personal character, had no set direction. As a result, they went everywhere. I saved a little for community college, but didn’t take it seriously, so I ended up taking out loans anyway. I bought video games and movies so that I could keep up in conversation, but didn’t really have much interest after the culture had moved on to the next thing. I was accumulating what amounted to a snapshot of who my friends were, but didn’t really have anything that spoke to what my goals were. I had no savings, no plan for future success, and increasingly no identity as all these people I was trying to imitate headed further down the paths they had chosen for themselves.

I’m coming up on my 10-year reunion this fall, and though I’m interested to see what everyone is up to these days, I’m not nearly as concerned as I was 10 years ago. I’ve finally realized that they are all separate people with separate dreams, separate skills, and separate lives. The things they’re doing, whether it’s with their money, their families, their careers, etc., don’t have to be the things that I do. Trying to emulate everyone else is partly what got me into the mess I’m in financially, and now that I’ve realized that, I’ve also realized that I’m the only one that’s going to help me get out of it. That’s ultimately the biggest reason to establish your own financial identity; you’re the only one that’s responsible for it. If I can’t control my credit card spending, no one else is going to help me figure it out. If eating out for every meal means I don’t have enough money to invest for retirement, no one else is going to support me when I hit that age. I’ve learned that I need to make decisions for myself, not based on what everyone around me is doing, because no one around me is responsible for me. I just wish I had learned that before I got thrown into adulthood.

Kyle is a real-life example of successfully paying off lots of debt using the snowball method. He writes about this and other personal finance topics at his blog, Steward and Slave.

Gary’s Tips

I could say we need to understand about “loans and interest rates”, or about “investing” money in the markets or 401k and retirement plans. We don’t learn “credit” and how that can and will affect you. But I pick the topic of “budgets” as the one that I missed learning about the most.

No matter what your lifestyle is, you need a budget to track and control your money. Even the “rich” do that and many people like me feel that wealth comes more from what you save than what you earn. If you aren’t aware of where your money goes and spend simply because you have money in hand, you will spend yourself into a financial mess. Not learning about that can set you up for failure in adult life.

&nbsp
Some links pay our bills. Our thoughts and opinions remain 100% objective. Find out more.
-
While I do strive to only write accurate information and dispense valuable advice, I am not a licensed financial adviser. All information is based solely on my personal experience and personal research and should be treated as such. Find out more.

Thanks for contributing, Amanda! Yes, it would be awesome if all highschoolers would read (and absorb) this kind of stuff. As they say, you can buy them books, and just hope they don’t eat the pages :).

Honestly, now that I look back I didn’t really learn anything useful in university. Being an economics major, most of the do retinal stuff is pretty useless in the real world. The economy cannot be quantified by any economic model, no matter how sophisticated.

Dan, this was a ton of fun and I really appreciate you reaching out so I could contribute. These bloggers all have some great comments and thoughts and reading a compilation post like this is very inspirational. Great idea and thanks for putting it together!
-Mike